World crude oil prices have plunged by around 30% since last Friday when the OPEC-plus agreement restricting production collapsed.
Reuters reported on March 9 that Brent crude was trading at $35.50 per barrel after hitting a low of $31.02, while West Texas Intermediate (WTI) was trading at $32.00 after bottoming out at $27.34. Neither grade has hit such a low mark since February 12, 2016, the news agency noted.
The main factor driving the decline has been the expectation that both Saudi Arabia and Russia are preparing to let oil production levels rise once the OPEC-plus agreement expires at the end of March. Higher output would probably bring prices down even further since world crude markets are oversupplied and demand is weak.
Goldman Sachs is certainly expecting oil prices to sink more. In a note dated March 8, the investment bank wrote: “The prognosis for the oil market is even more dire than in November 2014, when such a price war last started, as it comes to a head with the significant collapse in oil demand due to the coronavirus.”